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U.S. Oil Rig Count Rises to Highest Level Since 1993

General discussions of the systemic, societal and civilisational effects of depletion.

U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Geodesic » Sat 30 Jan 2010, 15:18:35

This really doesn't gibe with Simmons claim that the oil infrastructure is basically inadequate and falling apart.

http://www.bloomberg.com/apps/news?pid= ... MaBCGooOf0

Jan. 29 (Bloomberg) -- Crude oil rigs operating in the U.S. increased this week to the highest level in 16 years as drilling rose in Texas and the Dakotas, according to data published by Baker Hughes Inc.

Oil rigs rose by seven to 444, the highest level since the week ended Dec. 17, 1993. The count has more than doubled since June, when it bottomed out at 179.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby dinopello » Sat 30 Jan 2010, 15:25:27

We're gonna pump like there's no tomorrow !

Simmons underestimated the Stimulus :razz:

Pelosi needs fuel for her big jets :razz: :razz:
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Rod_Cloutier » Sat 30 Jan 2010, 15:33:07

Thats scary! From 179 to 444 in only 7 months.

This paints a clear picture that inventory stocks are being burned through rapidly, that the economic demand for oil is rising again, and that oil companies are now scrambling to make up for accellerating oil field depletion.

Many on this site forcast this would happen. That as soon as the economy recovered we soon would hit the ceiling on oil production again almost immediatly. Even if American demand is still falling, the growth of energy usage in China and India are bound to push oil prices higher. In fact, I am surprised with their double digit growth rates that this is not happening faster.

I think the price mechanism is being distorted as Chinese companies, (and their government), secure private non-disclosed contracts for oil at a fixed price with rogue regiemes such as Iran. As the Chinese are securing their oil supplies privately, not by publicly buying the oil on the open market, they are thus avoiding driving the market price of oil higher thru concealment of their hidden agenda.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby BlisteredWhippet » Sat 30 Jan 2010, 15:40:11

Geodesic wrote:This really doesn't gibe with Simmons claim that the oil infrastructure is basically inadequate and falling apart.

http://www.bloomberg.com/apps/news?pid= ... MaBCGooOf0

Jan. 29 (Bloomberg) -- Crude oil rigs operating in the U.S. increased this week to the highest level in 16 years as drilling rose in Texas and the Dakotas, according to data published by Baker Hughes Inc.

Oil rigs rose by seven to 444, the highest level since the week ended Dec. 17, 1993. The count has more than doubled since June, when it bottomed out at 179.


I hate to say it, but does any of the peakoil.com "investigative reporters" consult any other source outside Bloomberg?

My take on this information is this: it doesn't contradict Simmon's essential claims. It is a rather useless piece of information, correllating more strongly to market forces that anything else.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby shortonsense » Sat 30 Jan 2010, 16:15:22

Geodesic wrote:This really doesn't gibe with Simmons claim that the oil infrastructure is basically inadequate and falling apart.

http://www.bloomberg.com/apps/news?pid= ... MaBCGooOf0



A) Take an accountant by academic training.
B) Make certain he has no experience exploring for oil, has never found any oil, has never spotted a wellsite, worked as roustabout, driller, toolpusher or company man, has never produced a well, repaired any of the equipment on an oilwell, has never done proven reserves for any company in the United States or filled out Form 23 for the EIA, trenched in a pipeline or otherwise been involved in its design, construction and testing, and then exclude all engineering aspects in the entire industry, from well design to sitting as engineer in charge of a single, small, low pressure, slick water frac or acidization workover.
C) Make certain that this accountant has financial motivation for people always believing that oil and gas prices will ONLY increase.

And then ask the following questions..

1) Would you ask this person any question related to oilfield operations in the first place, under any circumstances?
2) If you mistaken did, no matter what the answer is, do you honestly expect it to contain any insight whatsoever into the issues involved under any circumstances other than pure luck?

Now, accompanied by a large booming voice from the heavens handing you tablets which say "THOU SHALT BELIEVE!!" you decide to ignore Points A and B, and 1 and 2......your burst of religious like fervor runs smack into Point C.

"Really doesn't gibe".......it seems completely reasonable that this is not a surprise in the least. Who would think it SHOULD gibe?
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Tanada » Sat 30 Jan 2010, 16:19:45

BlisteredWhippet wrote:
Geodesic wrote:This really doesn't gibe with Simmons claim that the oil infrastructure is basically inadequate and falling apart.

http://www.bloomberg.com/apps/news?pid= ... MaBCGooOf0

Jan. 29 (Bloomberg) -- Crude oil rigs operating in the U.S. increased this week to the highest level in 16 years as drilling rose in Texas and the Dakotas, according to data published by Baker Hughes Inc.

Oil rigs rose by seven to 444, the highest level since the week ended Dec. 17, 1993. The count has more than doubled since June, when it bottomed out at 179.


I hate to say it, but does any of the peakoil.com "investigative reporters" consult any other source outside Bloomberg?

My take on this information is this: it doesn't contradict Simmon's essential claims. It is a rather useless piece of information, correlating more strongly to market forces that anything else.



Maybe I am just odd but it seems obvious to me that nobody wanted to drill in the USA when the world oil price was crashing down into the $30's. Now that the price is dynamically hovering in the 70-80 band it is well worth it in money terms. Clearly this should mean that the number of rigs operating now will be much greater than the number operating in the first half of 2009.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby baha » Sat 30 Jan 2010, 17:05:58

To me this just means they are searching frantically for oil. Unfortunately (for them) most wells drilled are just dry holes.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Dreamtwister » Sat 30 Jan 2010, 17:21:16

baha wrote:To me this just means they are searching frantically for oil. Unfortunately (for them) most wells drilled are just dry holes.


Exactly. Would you want 1 rig that pumps 100 barrels per day, or 100 rigs that pump 1 barrel per day? I'd wager real money that the majority of those 444 rigs are strippers.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Geodesic » Sat 30 Jan 2010, 18:46:12

shortonsense wrote:
Geodesic wrote:This really doesn't gibe with Simmons claim that the oil infrastructure is basically inadequate and falling apart.

http://www.bloomberg.com/apps/news?pid= ... MaBCGooOf0



A) Take an accountant by academic training.
B) Make certain he has no experience exploring for oil, has never found any oil, has never spotted a wellsite, worked as roustabout, driller, toolpusher or company man, has never produced a well, repaired any of the equipment on an oilwell, has never done proven reserves for any company in the United States or filled out Form 23 for the EIA, trenched in a pipeline or otherwise been involved in its design, construction and testing, and then exclude all engineering aspects in the entire industry, from well design to sitting as engineer in charge of a single, small, low pressure, slick water frac or acidization workover.
C) Make certain that this accountant has financial motivation for people always believing that oil and gas prices will ONLY increase.


How disingenuous of you to leave out the fact that he's a financier intimately involved in the oil business for what, 30 years? And your qualifications?
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby shortonsense » Sat 30 Jan 2010, 19:45:31

Geodesic wrote:How disingenuous of you to leave out the fact that he's a financier intimately involved in the oil business for what, 30 years?


You are suggesting that 30 years of writing checks and helping service companies arrange their IPO has somehow given him knowledge related to industry corrosion control practices, or any other aspect of actual oilfield operations I enumerated above?

Geodesic wrote:And your qualifications?


I hold a degree in snake oil detection and have never forgotten what momma told me.....don't ever ask your accountant to do your brain surgery. I'm sure there is an oilfield equivalent, and Michael Lynch already has the quote for Simmons.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Tanada » Sat 30 Jan 2010, 19:46:51

Let us not get carried away folks, in 1993 there was a glut soon to burst onto the world stage, not long after that the price started going down and it stayed down for almost a decade. No Oil major in the USA was about to drill a bunch of wells in the USA while the world import price was rock bottom.

When the price started shooting up in 2004 the drill rig capacity ended up concentrated in the places willing to spend the most money, which was not the USA. When the price crashed at the latter half of 2008 the rigs started going idle as they completed whatever projects they were working on at the time. After a very slow 2009 and the slow decade of the 1990's there were suddenly a lot of idle rigs in the USA, and then in the latter half of the year the price settled into the 70-80 price band and suddenly it was very profitable to drill wells in the USA.

There is nothing the least bit mysterious about it, this is just a normal boom-bust-boom cycle for the drill rig owners. We can't look at every single news item and declare it is proof of anything or we end up sounding like Pollyanna and looking foolish as all get out.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby TheDude » Sun 31 Jan 2010, 05:27:46

Mid November 2008 429 oil rigs were drilling for oil, 96.6% of the current number.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby pup55 » Mon 01 Feb 2010, 09:38:35

Maybe I am just odd but it seems obvious to me that nobody wanted to drill in the USA when the world oil price was crashing down into the $30's. Now that the price is dynamically hovering in the 70-80 band it is well worth it in money term
s.

Mid November 2008 429 oil rigs were drilling for oil, 96.6% of the current number.


Rig usage is a function of three things: The risk associated with drilling a particular hole, the current and/or expected pricing, and the cost of drilling.

Drilling an oil well is hard work, as the Dirty Jobs guy found out not too long ago. People are not going to do it if the expected rate of return is not sufficiently high to offset their risk and/or the expense of getting down to the oil, wherever it might be.

In a world of $30 oil, in which you cannot go and borrow money to get your project started, you are not going to drill any oil. In a world of $75 oil, you might be more likely.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby eXpat » Mon 01 Feb 2010, 10:04:35

Geodesic wrote:This really doesn't gibe with Simmons claim that the oil infrastructure is basically inadequate and falling apart.

And, on the other hand...
UPDATE 1-Chevron's Richmond refinery likely to close -paper
SAN FRANCISCO, Jan 20 (Reuters) - Chevron Corp (CVX.N) is likely to close its oldest refinery, in Richmond, California, in a wider restructuring of downstream operations, the local newspaper's business editor wrote in a column on Wednesday.

The second-largest U.S. oil company halted work on a $1 billion upgrade of Richmond last July after a state judge ordered it, agreeing with environmentalists who brought a lawsuit that the refinery's environmental impact report was incomplete. The company later filed an appeal. [ID:nN20122859]

Chevron said on Tuesday it planned to cut refinery jobs and exit some markets, and the Contra Costa Times business editor, Drew Voros, expects details to be unveiled in March to include the closure of the 108-year-old refinery.
...
"We've operated in Richmond for more than 100 years, and we would hope to continue operating," he said of the San Francisco Bay refinery, which has capacity to refine more than 240,000 barrels of crude a day, ranking it 21st in the United States.

A Richmond closure would be only the latest response by refiners to a devastating squeeze on margins due to demand weakened by the economy, coupled with high crude oil prices.

Leading U.S. refiner Valero Energy Corp (VLO.N) said in November it would close its plant in Delaware City, Delaware, three months after indefinitely shutting its Aruba refinery. Sunoco Inc (SUN.N) has idled its plant in Eagle Point, New Jersey.
...
Voros cited sources at Chevron who said last year that the company had talks with Chinese buyers who would have dismantled and shipped the Richmond refinery to China, while the land would be kept as an offloading facility for refined products.

Just this month, larger rival Royal Dutch Shell Plc (RDSa.L) said it would transform its Montreal East refinery into a fuel terminal.

http://connect-services.reuters.com/article/idUSN2013740520100120
Crack Spreads Widen as Refineries Close in the U.S.
Feb. 1 (Bloomberg) -- As refineries from New Jersey to New Mexico close at the fastest pace in three decades, traders in Singapore are profiting from a new plant on India’s west coast and a ship heading for Florida filled with jet fuel from Taiwan.

The so-called refinery crack spread in Singapore, representing the value of fuels minus the cost of crude oil, may climb 50 percent to as much as $4.50 a barrel this year, according to a Bloomberg News survey of five analysts. U.S. refinery margins will drop 35 percent by December, futures contracts on the New York Mercantile Exchange show.
...
Royal Dutch Shell Plc of The Hague and San Antonio, Texas- based Valero led companies that shut 1.05 million barrels of daily capacity last year in North America and Europe, with another 1.32 million likely to close this year, Bank of America’s Merrill Lynch unit said in a Jan. 14 report.

Europe’s biggest refiner, Paris-based Total SA, is expected to announce today plans to end processing at its Flanders plant, which represents 137,000 barrels of capacity, or 7.2 percent of French crude consumption.

“In a Darwinian fashion, this materially aids margins for surviving refiners,” said James Schofield, an analyst at Bank of America Merrill Lynch in London.

http://www.bloomberg.com/apps/news?pid=20601072&sid=amg1Ou18W4wY
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby obixman » Mon 01 Feb 2010, 10:51:11

I think I can state with some assurence that the RIchmond refinery will be kept going in some capacity. As long as it operates, Chevron is grandfathered in for the envirnomental demage it's done through the years - the refinery has been there from early on - before there was ANY environmental movement. As I understand it, the cost of environmental remediation will be in the several billions of dollars.

Hence the factility will continue operating in some capacity. May not be any/many people there, though.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby copious.abundance » Mon 01 Feb 2010, 15:56:21

Closing refineries is not a sign of inadequate oil infrastructure, it is a sign of *excess* oil infrastructure.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Dreamtwister » Mon 01 Feb 2010, 16:22:57

OilFinder2 wrote:Closing refineries is not a sign of inadequate oil infrastructure, it is a sign of *excess* oil infrastructure.


Yeah, excess oil infrastructure because there's nothing left to refine.

I can't believe you're still trolling here after being humiliated as many times as you have, yet here you are. You must like it.
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby copious.abundance » Mon 01 Feb 2010, 21:07:48

Speaking of someone being humiliated, someone here doesn't know the difference between a rig and a well. :lol:
Dreamtwister wrote:
baha wrote:To me this just means they are searching frantically for oil. Unfortunately (for them) most wells drilled are just dry holes.


Exactly. Would you want 1 rig that pumps 100 barrels per day, or 100 rigs that pump 1 barrel per day? I'd wager real money that the majority of those 444 rigs are strippers.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby Bas » Mon 01 Feb 2010, 21:30:07

anyone any idea from which countries those rigs came from? It would sure be nice if other countries/regions had rigcounts....
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Re: U.S. Oil Rig Count Rises to Highest Level Since 1993

Unread postby shortonsense » Mon 01 Feb 2010, 21:50:39

OilFinder2 wrote:Speaking of someone being humiliated, someone here doesn't know the difference between a rig and a well. :lol:


Who cares as long as either one is a "stripper"? :-D
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